Sunday, November 18, 2018

Even as you read this, one of Indian aviation’s biggest deals may be coming together. The Tata Group may finally buy out the beleaguered Jet Airways which, for a third quarter in a row, posted huge losses (to the tune of Rs 1,297 crore) last week. Tata Sons Chairman N Chandrasekaran is said to be keen on the acquisition, and has apparently set the ball rolling with a feasibility study. If it works out, the Tatas will become a majority player in the skies, with this third acquisition after Vistara and Air Asia.
Or not. When Chandrasekaran ran the idea by the Board recently, he did not exactly receive an enthusiastic response. Among other things, a $2 billion capital infusion may be too large a price to pay to acquire only 24 per cent of market share. Analysts say at the heart of the dilemma is a clash of personalities. Chairman Emeritus Ratan Tata is allegedly not in favour of a deal unless Jet Airways Chairman Naresh Goyal, who owns a 51 per cent stake, steps down. “Jet Airways might survive, but I don’t know if Naresh Goyal will,” says Kuljit Singh, a partner at Ernst & Young.
Jet Airways has outlasted post-Liberalisation industry shakedowns; global fuel crises; and the 2008 recession. But, as of June 30 this year, the company’s net debt stood at Rs 7,364 crore – down from Rs 8,149 crore on March 31, 2018. Its stock price has also dipped sharply -- from Rs 883 in January to Rs 163 recently.
18/11/18 Satish Nandgaonkar and Labonita Ghosh/Bangalore Mirror Bureau